Dynamic managerial capabilities, firm resources, and related business diversification - Evidence from the English Premier League

To better understand how executives impact resource allocation, we investigate the three underpinnings of dynamic managerial capabilities (DMCs) as antecedents of related business diversification (RBD) and how they interact with firm resources to influence RBD. Taking football as the research subject, we analyze the joint impact of managerial human capital, managerial social capital, and managerial cognition within the board of directors of English Premier League clubs. We rely on a unique 15-year panel dataset and show that more specific managerial human capital and a long-term orientation among the board of directors increase RBD while additional general managerial human capital and managerial social capital diminish RBD. In addition, our findings reveal that DMCs moderate the relationships of physical and financial resources with RBD in different directions. Our study is amongst the first to analyze all three underpinnings of DMCs and to endorse the practical relevance of DMCs for RBD.